Cablegate: Flsn Attacks Against the Embassy Upset American And

VZCZCXYZ0002
RR RUEHWEB

DE RUEHMU #1236/01 3291656
ZNR UUUUU ZZH
R 251655Z NOV 09
FM AMEMBASSY MANAGUA
TO RUEHC/SECSTATE WASHDC 0198
INFO WHA CENTRAL AMERICAN COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHINGTON DC

UNCLAS MANAGUA 001236

SENSITIVE
SIPDIS
STATE FOR WHA/CEN AND EB/IFD/OIA
STATE ALSO FOR WHA/EPSC
TREASURY FOR INL AND OWH

E.O. 12958: N/A
TAGS: EINV ECON KIDE NU
SUBJECT: FLSN ATTACKS AGAINST THE EMBASSY UPSET AMERICAN AND
NICARAGUAN INVESTORS

REF: MANAGUA 1090; MANAGUA 907; MANAGUA 799

SUMMARY

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1. (SBU) American and Nicaraguan investors in the tourism
industry have expressed their displeasure with the Government of
Nicaragua (GON) regarding the October 30 attacks against the
Embassy by Sandinista National Liberation Front (FSLN) supporters.
They have told GON officials that the attacks have scared away
investors and tourists. American entrepreneurs also worry that
they may not be welcome in Nicaragua because of the government's
anti-American rhetoric. GON officials, including President
Ortega's family, hear the concerns of investors, but continued
rhetoric and future attacks cannot be ruled out so long as
political gain is put ahead of economic growth.

INVESTORS UPSET ABOUT ATTACKS AGAINST EMBASSY

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2. (SBU) American and Nicaraguan investors in the tourism
industry are upset with the GON for allowing FSLN supporters
to attack the Embassy on October 30 (Ref A). One American investor
stated that the GON and FSLN should know that the Embassy is
considered sovereign U.S. territory and many Americans in Nicaragua
are offended by the attacks and vandalism. Nicaraguan
entrepreneurs have also expressed their frustration with the GON,
noting that the government should have prevented the attacks and
that this incident has damaged Nicaragua's image in the United
States and international community.

BAD FOR BUSINESS

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3. (SBU) On November 19, the Association for Nicaraguan Investors
and Developers (ANID), an advocacy group for tourism and real
estate development, held a town hall meeting with Alvaro Baltodano,
Presidential Delegate for Investment Promotion, and Javier
Chamorro, Executive Director of ProNicaragua, the government's
investment promotion agency. Laureano Ortega, the son of President
Daniel Ortega and First Lady Rosario Murillo, also attended the
meeting; local media report that Ortega has an internship with
ProNicaragua. Investors complained that the attacks were bad for
business and have scared away tourists and other investors.
American entrepreneurs expressed their concern that they might not
be welcome in Nicaragua because of the GON's anti-American
rhetoric. One Nicaraguan investor told GON officials that he
attended the American Association of Retired Persons (AARP)
National Member Event and Expo on October 22-24 with ProNicaragua
(Ref B). He said that he had developed good contacts at the AARP
event, and he had followed up with them to explore business
opportunities. After the attacks against the Embassy, however, his
contacts decided that they did not want to do business in
Nicaragua.

4. (SBU) Baltodano said he understood investor concerns regarding
the attacks, and he had spoken to senior government officials about
the incident. He defended the FSLN's right to protest and avoided
criticizing the attacks, noting that investors must deal with the
political realities of Nicaragua. Baltodano asserted that the GON
wants to maintain bilateral relations with the United States,
including strengthening commercial ties. Chamorro added that
ProNicaragua is working within the GON to underscore the importance
of maintaining Nicaragua's image as an attractive place for foreign
investment. He acknowledged that the United States is Nicaragua's
biggest trading partner, and U.S. investors are important
contributors to Nicaragua's economic development. One American
investor suggested that there should be a mechanism to convey
investor concerns directly to President Ortega. Baltodano
responded that he communicates directly with President Ortega and
will convey these concerns to him. Note: Laureano Ortega took
notes during the meeting and did not speak. Several Nicaraguan
investors spoke to him privately before and after the meeting to
voice their concerns about the damage done to Nicaragua's image as
a result of the attacks. End note.

COMMENT

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5. (SBU) Investors in the tourism industry are already struggling
to attract tourists and maintain their businesses because of the
global economic crisis (Ref C). The attacks against the Embassy
were a serious blow to Nicaragua's tourism sector, and
entrepreneurs are reporting that some American and other foreign
tourists have cancelled their vacations here after the incident.
GON officials, including President Ortega's family, hear the
concerns of investors, but continued rhetoric and future attacks
cannot be ruled out so long as political gain is put ahead of
economic growth.
CALLAHAN

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